Managing Taxes in nopCommerce
Managing sales tax on e-commerce sites is very crucial as it is a compliance responsibility of an online seller. Collecting and remitting taxes to the authorities must be done with proper planning and regularly, to avoid penalties in the future. If you are involved with a third-party marketplace or any affiliates for that matter, these must be considered in your sales tax management. No matter which country or state you operate your online store from, nopCommerce has a well-designed Tax Module that helps your business get tax compliant by considering all these factors and stay away from trouble.
Let’s look at the various settings in the tax module and how you can leverage them to manage your taxes.
Managing taxes is very important for any business, and nopCommerce has an in-built tax module to do this.
Configure your tax settings in nopCommerce admin section ‘Configuration -- > Settings -- > Tax Settings’ as shown in screen shot below:
nopCommerce allows store owners to specify tax to be calculated based on either the Billing or Shipping address or by Default address (Address is mentioned by store owner). To specify this, select either ‘Billing Address’ or ‘Shipping Address’ or ‘Default Address’ option in ‘Tax based on’ dropdown in the tax settings page.
If ‘Billing Address’ or ‘Shipping Address’ options are selected but these addresses are not available then Default address is considered for tax calculations. Default address is specified by store owner in the ‘Default tax address’ section in the tax settings page as shown in screen shot below:
To configure how taxes should appear in the public store, use ‘Tax Display’ section in Tax settings page. ‘Tax Display’ section looks like the below screen shot and details on each option is provided below:
Allow Customer to select tax display type: Select this check box to show an option on public store using which users can view product price either by including or excluding tax.
Tax display type: If ‘Allow customers to select tax display type’ check box is not selected, then store owner can specify prices to be displayed either by including/excluding tax by selecting required option in the ‘Tax Display Type dropdown’.
Price Include tax: If store owners/vendors add product price by including tax, then select this checkbox so that no additional tax is added.
Display tax suffix: Select this checkbox if you need to show incl. tax /excl. tax suffix after product price.
Display all applied tax rates: Select this checkbox to display each applied tax in a separate line in shopping cart page.
Hide tax in order summary: Select this checkbox to hide tax in the order summary page when product price is shown including tax.
Force tax exclusion form order total: This setting is applicable only for pages where order subtotal is shown. If this checkbox is selected then tax is always excluded from the subtotal.
If there is any requirement to apply tax on shipping charges then select ‘shipping is taxable’ checkbox under ‘Shipping’ section in the tax settings page as shown in the screen shot below:
Select ‘Shipping price includes tax’ checkbox if the shipping price includes the tax. For calculating tax on shipping, select the tax category in ‘Shipping tax category’ dropdown. We will explain more on shipping categories in the below sections.
If in the selected payment method an additional fee needs to be taxed, then select ‘Payment method additional fee is taxable’ option in the ‘payment’ section of ‘tax settings’ page as shown in screen shot below:
Select ‘payment method additional fee includes tax’ checkbox if the payment method additional fee is inclusive of tax. If the payment method additional fee in not inclusive of tax then select tax category to be used for calculating tax on payment method additional fee.
nopCommerce also supports EU VAT (The European Union Value Added Tax). To enable EU VAT on your store, select ‘EU VAT enabled’ checkbox in the ‘VAT’ section of the ‘Tax settings’ page as shown in the screen shot below:
For more details on configuring EU VAT refer nopCommerce EU VAT configuration guide.
Not all products are taxed at the same rate; hence, to apply different rates on different products we need to create different tax categories. We can create different tax categories from ‘Configuration à tax à Tax categories’ menu as shown in screen shot below:
nopCommerce package includes a Manual (Fixed or By Country/State/Zip) tax provider package. Tax provider can be configured from ‘Configuration à Tax à Tax Providers’ menu as shown in the screen shot below:
Click on ‘Configure’ button to edit configurations. Using Manual (Fixed or By Country/state/Zip) tax provider, you can set a Fixed rate for the specific tax category for all regions as shown in the screen shot below:
Else you can create tax rates specific to Country/State/Zip as shown in screen shot below:
If the Zip code is not provided then the same rate is applicable for the selected country & state, irrespective of zip code.
The Default nopCommerce package using Manual (Fixed or By Country/State/Zip) tax provider may not be sufficient for very large stores and if you are selling to customers in multiple countries. Also, nopCommerce does not provide ready reports on sales tax as required by some of the countries wherein taxes need to be processed either on monthly or quarterly basis. To overcome this problem there are ready-made nopCommerce plugins available to integrate with popular tax service providers like ‘Tax Cloud’, ‘Tax Jar’, ’Avalara’ etc. You can also find more plugins on nopCommerce Marketplace.
Once you have completed all these configurations to apply the specific tax on products, select a specific tax category in the product page as shown in the screen shot below:
If any specific product is exempted from tax, then select ‘Tax exempt’ check box in the product page as shown in screen shot below:
It is very important for a business to know how much tax it should charge on the various products, when to collect and remit tax, and what are the tax laws of the region that they operate from. Managing taxes on the nopCommerce platform is very convenient with the in-built tax module and, as a store owner, you need not have to worry about outsourcing tax management activities to a third-party. nopCommerce helps you keep a track on your product sales tax thereby making sure you don’t run into any legal issues with the government.
Shwetha Bhat | Blogger
Manjunath Govindappa | ASP.NET Technical Lead